Heat, Health and the Increasing Costs of Living - A Call for Action

The new analysis by adelphi global is the first of its kind to trace a direct link between the physical health tolls of climate change and the resulting strain on already strained family budgets and national economies. Spanning eight diverse economies—Bangladesh, Brazil, France, India, Indonesia, Italy, Nigeria, and South Africa—the research bridges the gap between climate science, public health, and economic analysis.

Extreme heat is being made more frequent and intense by climate change, primarily driven by the burning of fossil fuels like oil, coal, and gas. This year has already seen some of the worst heatwaves ever recorded, some virtually impossible without the influence of climate change. 

The report introduces a novel analytical framework that captures two distinct but reinforcing pathways through which climate-driven heat erodes standards of living. The first is a reduction of income: heat stress forces workers to slow down, take necessary extended breaks or stop working altogether, and recovery from heat-related illness can take weeks. Especially for workers in the informal economy – who lack paid sick leave or health insurance – this can push them into poverty. The second is an increase in costs: heat-related illness drives up and out-of-pocket medical spending. 

Key findings:

• In all countries analysed the risk of experiencing financial losses by individuals is significantly increased by the negative impact of extreme heat, especially on the health of workers in climate vulnerable sectors, as well as the resulting personal medical expenditures. 
• In countries such as Bangladesh, India, Indonesia and Nigeria, workers in agriculture and construction – sectors that underpin millions of livelihoods – are already losing the equivalent of around 20 working days or more per year to heat stress, which leads to an important loss of income, especially for families already struggling to make ends meet.
• Even in countries where the rate of working day losses is lower, such as Brazil, South Africa, France and Italy, health impacts from heat lead to significant reductions in GDP each year with losses up to 25 billion USD due to an increase in heat-related deaths.
• In the countries studied, the compound effect of falling incomes and rising costs is felt most acutely in Bangladesh, India and Nigeria, where high working-hour losses, heavy out-of-pocket burdens and weak social protection systems combine to create cascading risks of poverty. The report warns that these dynamics could push significant portions of the population in these countries below the poverty line.

The findings come at a crucial time for climate policy; climate, health, and labour policy must be integrated into a self-reinforcing governance triangle that places individual protection at its centre. The current momentum around global adaptation governance offers a window of opportunity - focusing on strengthening public health and social security systems. Good practice examples exist to use targeted insurance instruments or compensation systems for workers affected by extreme heat. 

Key recommendations include 

• Embedding heat-health impacts into UNFCCC processes, including the Global Goal on Adaptation indicators and the Belem Health Action Plan (BHAP).
• Linking national adaptation plans to concrete social protection measures, including compensation for lost working time and state-supported insurance schemes.
• Extending formal labour protections to cover heat-related losses, particularly for informal workers, and addressing the gender dimensions of heat vulnerability.
• Mobilising adaptation finance specifically for health, with clear guidance on how funding can be deployed to protect living standards.